High Cost of Ammunition Question

Obviously, and for the most part, supply and demand will determine the retail cost of products an services. That aside, I assume the cost to manufacture ammunition has changed very little.

My question is who is profiting most from the substantial increase in the cost of ammunition? Is it the manufacturers or the retailers?

I think the honest answer is scalpers/resellers.

While their have been almost no sales for the last few years, the retail price at big-box stores has been more or less stable (10-20% increase at Bass Pro for example). But it’s never in stock. Because even with restriction efforts, plenty of people just buy all that comes in and resell online. And the demand, especially in our currently polarized climate is there.

The manufacturers are reporting being at capacity, as seen here:

http://bulletin.accurateshooter.com/2020/12/americas-big-ammunition-plants-are-running-at-full-capacity/

In this video, Vanderbrink asks for patience and seeks to quash rumors. While conceding that the pandemic has created challenges, Vanderbrink declares that the ammo plants are running at full capacity:

“We know, ammo seems hard to come by right now. But rest assured, we are building and shipping more and more every day[.] We are making ammunition every minute of every day … We are making more hunting ammo than we ever have. We are doing our damndest to meet the demand!”

And few companies want to invest the $$$ to build new factories with the possibility that by the time construction is done that demand will be back to lower levels, or that the regulatory environment will change. So fixed supply, increased demand, prices keep going up especially with hoarders and scalpers.

Heck, I haven’t gone shooting since 6 months before COVID became a US-wide concern, as prices were already high due to panic buying from social unrest, and it’s only gotten worse. Sure, I could go practice, but I can’t replace what I shoot at any reasonable cost even for common calibers.

For what it’s worth, I’ve seen some online retailers that I trust show prices that while high, aren’t the 200+% markup we had earlier. But even the common calibers are still about 50% higher (and again, with no sales) than 3 years ago.

A few articles on the issue with scalpers -

Serious shooters should handload/reload (make their own ammunition). Is there a shortage of reloading supplies?

I think that right wing gun nuts worried about Biden and the Democrats taking away their guns is a bigger problem that scalpers. That’s what happened when Obama was elected.

I’m a casual shooter, but my FiL reloads, to the tune of several thousand a year. 2 years back I was trying to get him primers and Bullseye powder as part of his Xmas present (per his request). It was out of stock through BassPro, and backordered. And pushed back. And again, and then cancelled by Basspro as they said they could not give a date when it would be filled.

Reloading supplies are in just as short supply as ‘finished’ ammunition. And heck yes, a LOT of the demand for finished ammunition driven by hoarders, especially certain right wing nuts, but a lot of the demand for both weapons and ammunition come from first time gun buyers, often non-traditional (ie female, PoC, or both) that have surged dramatically after legitimate distrust in policing became widespread. I brought that up in a prior thread -

I will agree that reloading supplies are almost certainly hoarder based - you aren’t going to be snatching this up unless you already have the equipment. Second, and a telling point, for a while you couldn’t get much if any used or new brass - people were reloading and reselling at the aforementioned 200+% over new ammo.

But the OP specifically asked

The retailers are 10-20% more. The manufacturers costs may also be higher from costs and labor standpoint, that would probably factor into the percentages above. But the high costs seen, especially online? Price gouging and scalpers. When you see someone selling WWB (Winchester White Box) of 50 rounds of 9mm Luger for $50, the answer is evident.

There is where I live. The hubs is a reloader, and powder and primers are both scarce and expensive if you can find them. He casts his own bullets from reclaimed lead and reuses brass, so I don’t know if those items are also in short supply.

That is not a valid assumption. Almost all fundamental materials are up in price. Copper (part of brass) has doubled in price in the last 18 months. The other part of brass, zinc, is up too, though not my as much. Lead is up 25%, though the lead used in ammunition is of lower purity than other kinds.

“sales online”???

Private citizens can ship bulk ammunition by mail or Fed-Ex in the USA? the Canadian mind boggles…

Sure you can buy ammo on line from a private party or a gun shop even in another state and have it shipped directly to you. No paperwork other than paying for it. You can also buy a gun on line but you must have that shipped to a FFL (Federal Firearms License) holder like a local gun shop. Then you have to go in and pay $35 transfer and background check fee. The background check only took me about 10 minutes, some times it can take longer, and then just carry it out. But there is nothing like that for ammo.

I bought one of the new Ruger 57 pistols earlier this year and the ammo was already pretty expensive so I only bought 500 rounds, I wish I had bought more because it is now up to an average $1.50 per bullet. I could make an easy several hundred dollars just by selling my remaining stock.

I am watching the prices on this web site to see if they will come down. Some of the sellers on this site are gun shops but many are just resellers who buy it up when they can find it and resell at a mark up.

Ammo for Sale - Buy Ammo at GunBroker.com

The most expensive place I’ve seen to buy is at the gun shop. They almost always have at least something in stock, but you may be paying several times what you’d pay if you found it in a retailer.

Scalpers are not contributing to the ammo shortage - they are easing it.

If you passed an ‘anti-scalping’ law, all that would hapoen is that ammunition would either not be available at any price, or retailers would raise their own prices to what scalpers are charging.

The scalpers exist because for whatever reason, the manufacturers and their retailers are not raising the price of ammo to the new ‘market clearing price’ based on increased demand. Maybe because of contract lead times, MSRP rules, or whatever. Scalpers are more nimble and can react faster to changes in demand. They are a legitimate part of the market.

But that wasn’t the OP’s question. It was who was profiting the most.

I was responding to your link which claimed that scalpers are driving up prices and contributing to the shortage.

If producers and retailers have not raised their prices above the increase in cost, then the manufacturers and retailers are slightly benefiting in that they are clearing inventory immediately and saving money on inventory costs and from the efficiency of running at 100%.

The scalpers make the most intermediate profit in that circumstance, although their risk is higher in that they could wind up holding a lot of expensive inventory if the price drops.

The service they add to the public is that by raising prices they drive out the people with the least need for ammo - hoarders, people stocking up ‘just in case’, which leaves more stock for people woth higher value uses (i.e. people who have none at all, hunters, private security) who are willing to pay more.

If it weren’t for scalpers, Low-value users woild wind up with more than they need, and people who really need the stuff might not be able to get it at all.

Assuming of course, that your definition of low-value being people who cannot afford to pay elevated prices, and high value being people who can.

Irrelevant. Absent scalpers, the people who can afford to buy 5,000 rounds at a time would still clear out inventory, then that poor woman with the threatening ex-husband can’t get a single hox of ammo for her new gun at any price, even thiugh she might have been willing and able to pay more.

Ultimately, if all you need is a single box of ammo it’s not THAT expensive, even from scalpers. It’s the people who buy lots of 500 at a time and go to the range every weekend who are really paying for the high prices. But at least the people who really, really need the ammo can still get it. Absent scalpers, trying to get ammo would be a constant game of first-come, first-served.

Not everything is about the haves and have-nots. It’s simple economics. If you set the price of something well below the market-clearing price, you’ll soon run out. And the product you did have will not have been allocated efficiently. I.e, some of it will now be locked up in the basements of hoarders who didn’t really need it at all but who had no incentive to minimize their purchases, or people will still buy as much as they can and blow it off at the range while people with more serious needs will go without.